European shares hit nine month high, dollar wobbles after Powell remarks

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By Alun John

LONDON, Feb 8 (Reuters) -Global shares jumped and most currencies rose against the dollar on Wednesday as investors discerned a dovish tone in comments from Federal Reserve Chair Jerome Powell, though a policy tweak by the ECB meant European bonds sat out the rally.

MSCI's world share index .MIWD00000PUS rose 0.3%, heading back towards the nine-month high it hit in early February, while Europe's STOXX 600 index .STOXX gained 0.85% to a fresh nine-month peak.

Major benchmarks in France, .FCHI Britain .FTSE and Germany .GDAXI were all comfortably in positive territory too, after Wall Street gained overnight and Asia .MIAPJ0000PUS rose earlier in the day.

U.S. share futures were around 0.4% lower ahead of Wednesday's open, however. ESc1, NQcv1

In an eagerly awaited speech on Tuesday, Powell reiterated that disinflation has begun but warned Friday's eye-popping jobs report showed why the battle against inflation will "take quite a bit of time".

The data showed the surprising addition of 517,000 new jobs in January and stoked fears that the tight labour market may compel the Fed to remain hawkish. Investors were relieved that that Powell did not lean further into this argument.

"The market is looking for a dovish message where it can almost regardless. Powell said effectively the terminal rate could be higher than the market expects, but the Nasdaq and S&P500 were up. I think they're wrong," said Ben Jones, director of macro research at Invesco.

Aggressive rate increases by the Fed and other central banks last year to tame inflation hurt shares and boosted the dollar, but those trends have reversed this year on signs that inflation has started to slacken, raising hopes of rate cuts towards the end of 2023.

"At the moment (markets are) all about the Fed, but at some point it has to morph into being about growth and earnings growth as well," said Jones.

Earnings boosted European oil and gas stocks .SXEP, the top regional sector on Wednesday with a gain of 2%, as Finnish refiner Neste NESTE.HE added 10% and Norwegian oil and gas giant Equinor EQNR.OL rose 7% after each reported a strong quarter.

French bank Societe Generale SOGN.PA fell 3.7% though after a five-fold hike in bad loan provisions.

Powell's avoidance of a more hawkish tone also guided currency markets, with the euro EUR=EBS rising as much as 0.29% against the dollar, and the pound GBP=D3 gaining 0.49% at one point. FRX/

"The dollar selling also reflected what Powell didn’t say," said MUFG FX analysts in a morning note to clients.

U.S. Treasuries firmed a little with the benchmark 10-year yield US10YT=RR down 3 basis points (bps) to 3.6547% and the two year yield US2YT=RR down 4 bps. US/

Yields move inversely to prices.

In Europe, however, bonds continued to sell off following a sharp tumble the previous day after the European Central Bank said it would cut the interest rate it pays governments on deposits. GVD/EUR

Two-year German yields DE2YT=RR, the most sensitive to any shifts in expectations for interest rates and inflation, rose by as much as 11 bps to 2.725% in early trading, their highest since Jan. 3.

The other overnight news event was U.S. President Joe Biden's State of the Union speech in which he challenged Republicans to lift the U.S. debt ceiling and support tax policies that were friendlier to middle class Americans.

Assailing oil companies for making high profits and corporate America for taking advantage of consumers, Biden used his prime time speech to outline progressive priorities of his Democratic Party that are anathema to many Republican lawmakers.

Oil prices ticked up on Wednesday, continuing this week's gains, with Brent crude LCOc1 at $84.05, up 0.4% on the day. U.S. crude CLc1 rose 0.8% to $77.84 per barrel, helped by the slightly softer dollar. O/R

Gold likewise rose, with the spot price XAU= edging up 0.1% to $1876.5 per ounce.

World FX rates YTD

Global asset performance

Asian stock markets

Additional reporting by Ankur Bannerjee Editing by Kirsten Donovan

To read Reuters Markets and Finance news, click on For the state of play of Asian stock markets please click on: 0#.INDEXA

إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.

جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.

أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.

نحن نستخدم ملفات الكوكيز لنمنحك أفضل تجربة على موقعنا. يمكنك قراءة المزيد أو تغيير إعدادات الكوكيز.

تحذير المخاطر: رأس مالك في خطر. المنتجات التي تستخدم الرافعة قد لا تكون مناسبة للجميع. يرجى الاطلاع على تنبيه المخاطر.